What is dividend?
The part of a company’s earnings that is distributed to shareholders. It can be in the form of cash or shares. A company is under no obligation to pay a dividend, and its board may decide to omit a payout if it feels cash flow is insufficient or should be used for other purposes, such as to reduce debt. In some countries, dividends are paid quarterly; in others, they are paid once or twice a year.
A one-off dividend paid to shareholders separate from the regular payout.
Annual return from holding a stock, determined by dividing the company’s total dividends for the year by the current share price (adjusted for any share splits).
Date of record (or record date)?
The date on which an investor must be holding stock to be entitled to that company’s dividend. If an investor buys the stock after a dividend is declared but before the date of record, the stock is described as cum dividend; if the stock is bought after the record date, it is ex-dividend.
A share goes ex-dividend (ex-div) when buyers are no longer entitled to the dividend recently declared by the company. The date from which this occurs is the ex-dividend date.
Difference between record date and ex-dividend date?
Once the company sets the record date, the ex-dividend date is set based on stock exchange rules. The ex-dividend date is usually set for stocks two business days before the record date. If you purchase a stock on its ex-dividend date or after, you will not receive the dividend payment.
A payment date is the date on which a declared stock dividend is scheduled to be paid.
Dividend reinvestment plan?
An arrangement to allow shareholders to automatically use all or part of their dividends to buy new shares in the company, sometimes at a discounted price.
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